REPUBLIKA.CO.ID, JAKARTA -- The government will subside the rural electrification scheme called Program of "Indonesian Terang" (PIT) for thousands of backward villages.
The power would be generated from renewable energy sources for the electrification villages in remote and isolated areas, islands or frontier areas, said Energy and Mineral Resource Minister Sudirman Said in a statement here on Tuesday.
No investors would venture building electric infrastructure in rural areas especially in frontier areas as it would not be commercially feasible, Sudirman said.
"Therefore, the involvement of the state is necessary to bridge the economic gap through a scheme such as by providing infrastructure, feed in tariff and price subsidy," he said after a coordinating meeting on Program of Indonesia Terang.
He said subsidy on the program is only 10 percent of the subsidy budget provided by the government for oil fuel.
He said in the past 10 years subsidy on oil fuel which causes environmental pollution totaled Rp2,600 trillion and the subsidy on clean program in the next 10 years would only 10 percent of that amount.
He said electrification program would help accelerate economic development and improve the welfare of in rural community.
Currently 12,659 of 74,754 villages in Indonesia are still without electricity and 65 percent of them are in six provinces in eastern Indonesia.
Sudirman said he hoped the fund for the program would be available in 2016.
"In the next two week we would coordinate with regional administrations and will form a PIT task force," he said.
In 2017, the energy and mineral resources ministry may no longer directly build energy infrastructure. The job would be handled by state companies or the private sector.
Vice Finance Minister Mardiasmo, who also took part in the working meeting, said the rural electrification program could be financed with funds from various sources including special allocation fund for energy, fund from oil production sharing, and rural fund.
"If legal basis has been available the finance ministry is ready to set aside and disburse fund for PIT," he said.
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